Why I stopped ignoring my 401k fee breakdowns

I used to just glance at my monthly statements and think 'cool, money is going in.' Then last year I actually read the fine print on my 401k and saw I was paying 1.2% in fees every year. That adds up to like $60,000 less over 30 years on a $50k balance. Now I check those expense ratios every time I pick a fund, anyone else dig into those hidden costs?

2 comments

2 Comments

park.tara29d ago

Good on you for catching that. The 1.2% is brutal over time. I switched my whole 401k to index funds with expense ratios under 0.05% and it saved me about $2,000 a year on a $200k balance. Most people don't realize they're paying for active management that rarely beats the market. Easiest way to check is just sort your fund options by expense ratio and pick the cheapest S&P 500 index fund. Set it and forget it after that.

wendy_garcia1629d agoOG Member

Switched mine over after seeing the difference on a $50k balance. Saved enough in fees to cover a weekend trip each year. People sleep on that 1% creep until they run the numbers.